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Why Is Chesapeake Energy (CHK) Down 9.2% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Chesapeake Energy Corporation (CHK - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Chesapeake Energy Q4 Earnings Beat, Reserves Grow - Feb 23, 2017
Chesapeake Energy Corporation reported better-than-expected fourth-quarter 2016 results on considerably low operating expenses and increased price realizations for oil and natural gas. This upside was partially negated by lower oil equivalent productions.
Earnings per share (excluding special items) of $0.07 beat the Zacks Consensus Estimate of $0.06. The company had reported adjusted loss per share of $0.16 in the prior-year quarter.
Total revenue decreased to $678 million from $1,269 million a year ago. The top line also failed to beat the Zacks Consensus Estimate of $1,059 million.
Operational Performance
Chesapeake’s production for the reported quarter decreased 13.1% year over year to approximately 53 million barrels of oil equivalent (MMBoe). Production consisted of approximately 8 million barrels (MMbbls) of oil (down 11.1% year over year), 236 billion cubic feet (bcf) of natural gas (down 12%) and 5 MMbbls of NGL (down 29%).
Oil equivalent realized price in the reported quarter was $21.24 per barrel compared with $16.20 per barrel a year ago. Average realizations for natural gas were $2.59 per Mcf as against $1.99 per Mcf in fourth-quarter 2015. Oil was sold at $47.95 per barrel compared with $38.33 per barrel in the prior-year quarter.
Total capital expenditure decreased to $463 million from $548 million in the fourth quarter of 2015.
On the cost front, quarterly production expenses decreased more than 18% year over year to $2.98 per Boe.
Expenses
Total fourth-quarter 2016 operating expense was $2,318 million, down 58.4% year over year.
Financials
At the end of the quarter, Chesapeake had cash balance of $882 million. Net long-term debt was $9,938 million.
Reserves
As of Dec 31, 2016, Chesapeake Energy had total proved reserves of 1,708 million barrels of oil equivalent (MMBoe), significantly higher than 1,504 MMBoe at the end of Dec 31, 2015.
Guidance
Chesapeake expects 2017 production to be in the range of 532,000–562,000 Boe per day. Moreover, the company expects 2017 capital spending in the $1,900–$2,500 million band.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been two downward revisions for the current quarter compared to one upward. In the past month, the consensus estimate also shifted downward by 18.8% due to these changes.
Currently, Chesapeake Energy's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Chesapeake Energy (CHK) Down 9.2% Since the Last Earnings Report?
It has been about a month since the last earnings report for Chesapeake Energy Corporation (CHK - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Chesapeake Energy Q4 Earnings Beat, Reserves Grow - Feb 23, 2017
Chesapeake Energy Corporation reported better-than-expected fourth-quarter 2016 results on considerably low operating expenses and increased price realizations for oil and natural gas. This upside was partially negated by lower oil equivalent productions.
Earnings per share (excluding special items) of $0.07 beat the Zacks Consensus Estimate of $0.06. The company had reported adjusted loss per share of $0.16 in the prior-year quarter.
Total revenue decreased to $678 million from $1,269 million a year ago. The top line also failed to beat the Zacks Consensus Estimate of $1,059 million.
Operational Performance
Chesapeake’s production for the reported quarter decreased 13.1% year over year to approximately 53 million barrels of oil equivalent (MMBoe). Production consisted of approximately 8 million barrels (MMbbls) of oil (down 11.1% year over year), 236 billion cubic feet (bcf) of natural gas (down 12%) and 5 MMbbls of NGL (down 29%).
Oil equivalent realized price in the reported quarter was $21.24 per barrel compared with $16.20 per barrel a year ago. Average realizations for natural gas were $2.59 per Mcf as against $1.99 per Mcf in fourth-quarter 2015. Oil was sold at $47.95 per barrel compared with $38.33 per barrel in the prior-year quarter.
Total capital expenditure decreased to $463 million from $548 million in the fourth quarter of 2015.
On the cost front, quarterly production expenses decreased more than 18% year over year to $2.98 per Boe.
Expenses
Total fourth-quarter 2016 operating expense was $2,318 million, down 58.4% year over year.
Financials
At the end of the quarter, Chesapeake had cash balance of $882 million. Net long-term debt was $9,938 million.
Reserves
As of Dec 31, 2016, Chesapeake Energy had total proved reserves of 1,708 million barrels of oil equivalent (MMBoe), significantly higher than 1,504 MMBoe at the end of Dec 31, 2015.
Guidance
Chesapeake expects 2017 production to be in the range of 532,000–562,000 Boe per day. Moreover, the company expects 2017 capital spending in the $1,900–$2,500 million band.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been two downward revisions for the current quarter compared to one upward. In the past month, the consensus estimate also shifted downward by 18.8% due to these changes.
Chesapeake Energy Corporation Price and Consensus
Chesapeake Energy Corporation Price and Consensus | Chesapeake Energy Corporation Quote
VGM Scores
Currently, Chesapeake Energy's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.